DuPont Decomposition
Why does EMKAY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.8% = 17.9% × 0.26 × 4.07
Latest: FY2025
Profitability
Net Margin
17.9%
-12.7% →17.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.26x
0.06x →0.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.07x
3.47x →4.07x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 21.3 pp over 3 years. Driven by net margin improving (-12.7% → 17.9%), asset turnover improving (0.06x → 0.26x), leverage rising (3.47x → 4.07x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -12.7% | 0.06 | 3.47 | -2.5% |
| FY2024 | ₹0Cr | ₹0Cr | 11.7% | 0.08 | 4.42 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 17.9% | 0.26 | 4.07 | 18.8% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.